What Criteria Are Used to Determine How to Record a Factoring

question 14

Short Answer

What criteria are used to determine how to record a factoring transaction?

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Definitions:

Joint Operation

A business activity undertaken by two or more parties who maintain joint control and share both the assets and liabilities related to the operation.

Accounting Entry

A record that represents a transaction in the accounting books of a company.

Joint Control

Joint control exists in a business arrangement when more than one party has the power to govern the financial and operating policies of an economic activity to benefit from it.

Equal Interest

A situation where all parties or stakeholders hold an identical percentage or stake in an agreement, asset, or entity, ensuring a fair distribution of rights and obligations.